Skilled nursing facility operators in Minnesota are finding themselves between a rock and a hard place as they deal with Medicare reimbursement cuts along with constricted state Medicaid budgets that are expected to grow even tighter.

“At this point, I would classify our situation as fairly desperate,” Jon Riewer, CEO and president of Moorhead, Minn.-based Eventide Senior Living Communities, told North Dakota-based Inforum.com. “It’s hard not to feel like one of the most important things we can do as a state is protect our seniors, but we very much feel like we’re at the bottom of the food chain.”

State legislators have set a budget target of cutting about $150 million from the DHS’s two-year, $11 billion budget, Inforum.com reports.

Eventide isn’t the only senior living provider impacted by state lawmakers’ budget proposals for Minnesota’s Department of Health and Human Services, according to Riewer.

A side effect of reduced reimbursements, Eventide is having difficulty retaining employees, in turn making it harder to provide quality care to residents, he says in the article. Plans for 2-3% pay raises for caregivers built into lawmakers’ budget-cutting proposal will be “too little too late.”

Labor costs typically account for 50-70% of a senior care facility’s operating budget, according to labor management software company OnShift, and many providers say they can’t afford to pay their employees more as they struggle to protect their bottom lines from the impact of state funding cuts.

The consequence for some is high turnover among caregivers who haven’t been getting raises and whose wages may not reflect the kind of work they do.

Those pay-related retention issues and reimbursement cuts along with other factors are putting nursing homes at risk all across the state, Patti Cullen, president and CEO of Care Providers of Minnesota, told Inforum.

Out of about 380 nursing homes in the state, approximately 115 are in financial crisis, according to the article.

Rather than pursue more budget cuts to the DHS, Minnesota needs to invest in senior care and services, says Gayle Kvenvold, Aging Services of Minnesota president and CEO.

“Minnesota is aging,” she told Inforum. “We need to address the demographics and we need to do it in this coming biennium. We need to be ready.”